The Difference Language Makes

Two professors, one at Princeton, the other at Northwestern, have concluded in a recent study that power is highly concentrated in America in a way that threatens democracy. The study got a lot of press, but the language that was used describing it was particularly interesting.

Reported first by the BBC, and then widely circulated, their study showed: “When a majority of citizens disagrees with economic elites and/or with organized interests, they generally lose.” On the other hand: “when fairly large majorities of Americans favor policy change, they generally do not get it.”

In its coverage of the study, MSNBC put it this way: “Americans may like to think they live in a Democracy, but a new study suggests the opinions of a moneyed elite class are far more influential than those of the masses.” They note that the researchers referred to their finding as “economic elite domination,” but commented that “another term could also be used: Oligarchy.” (See, “U.S. More Oligarchy than Democracy, Study Suggests.”)

The BBC concluded in language what would distress an 8th grade social studies teacher extolling our “democratic system:” “if policymaking is dominated by powerful business organizations and a small number of affluent Americans, then America’s claims to being a democratic society are seriously threatened.” (See, “Study: US is an Oligarchy, Not a Democracy.”)

The problem we have with “oligarchy” is that recently the term has been applied to Russia where a small group of “oligarchs” have profited exorbitantly from the privatization of industries previously owned by the state. Forming a partnership, in effect, with the government, they essentially run the economy, earning billions while supporting the repressive regime. That is an uncomfortable analogy for us. It feels corrupt. But now it has corroboration from academic research.

The Huffington Post, in its coverage of the story, offered an historical perspective: “A key struggle throughout US history has been whether or not the society’s resources would be mobilized to expand access and opportunities across the population, and who would pay for it.”

The article noted that the first efforts to establish a Federal income tax in peacetime occurred in 1894, exempting almost everyone except the very rich. “American oligarchs responded by using wealth power to hire a phalanx of lawyers to challenge the tax all the way to the Supreme Court. In a 5-4 decision, it was struck down as a ‘communistic threat.’”

According to The Huffington Post, “American oligarchs use their wealth power to fund conservative think tanks that have transformed the estate tax into the ‘death tax,’ and amplified messages like ‘government is the problem.’ Oligarchs also hire armies of tax lawyers, accountants, lobbyists, and wealth management specialists to create complex ‘tax products’ and shelters, and to relocate fortunes to secrecy havens scattered around the globe.”

“This offshore financial dark matter is estimated to be between $5 trillion and $25 trillion, and it is mostly untaxed. The portion of these hidden riches belonging to Americans costs the U.S. treasury $80 billion annually in lost taxes.” (See. “Oligarchy and Democracy in America.”)

This daring new use of “oligarchy” brings a breath of fresh air to the current debate about income inequality, opening up ideas seldom seen in the media.